Dunleavy backtracked on majority of state operations vetoes, excluding transfers

In terms of spending on state operations and the size of government in Alaska, Gov. Mike Dunleavy has backtracked more than Alaskans have been led to believe.

The headline in the Anchorage Daily News said he “stands by most of his June budget vetoes.” KTUU said he approved a “majority of earlier vetoes.” The Fairbanks Daily News-Miner said he “will maintain a vast majority of his original operating budget vetoes.”

Those words do not convey the full story.

If you exclude more than $100 million in vetoes that have nothing to do with the size of government and involve either a shift from the state to local governments or a transfer from one government pocket to another, Dunleavy did not do what the headlines suggest.

He backtracked on $150 million in state operations spending, largely consisting of money he allowed to be directed to the University of Alaska, monthly cash payments to poor old people and a variety of education, arts and social service programs.

His vetoes of state agency operations, on which he did not reverse himself, total about $100 million.

With these vetoes, he took aim mainly at health care for poor people, chopping at least $58 million from Medicaid coverage, including dental care for poor people.

But a large portion of those alleged savings will not come to pass because the Dunleavy administration does not have a plan to reduce Medicaid services. Many health care officials predict there will be a big supplemental budget early next year to make up the shortfall.

The final operating budget is about $5 billion, about $100 million more than the operating budget he approved after the June 28 vetoes.

In June and again last week, Dunleavy vetoed a lot of items that fall into the "pass the buck" category and do not reduce the overall size of government.

This includes more than $100 million in transfers—$50 million in school debt reimbursements to local governments, $20 million for rural education areas and $30 million that would have capitalized a community assistance fund. These are reductions in state spending, not reductions in government.

In the case of local school debt, the money will have to be paid by local taxpayers. The veto of the community assistance money means a reduction in future payments to local governments.

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